OCBC flags recovery signs after Q4 profit drops 9% to $1.13 billion

SINGAPORE (REUTERS) – Singapore’s second-biggest listed-lender, Oversea-Chinese Banking Corp, reported a 9 per cent decline in quarterly profit, dragged down by lower total income in pandemic-hit markets, but showed growth in its wealth business.

OCBC’s lower-than-expected fall in net profit came after larger peer DBS also posted a profit decline on weak margins but flagged a pick-up in growth.

“While economic conditions have started to show signs of stabilisation and we are seeing increased activities in some pockets of the economy, the recovery is not yet broad-based,” said OCBC’s group CEO Samuel Tsien, who will be succeeded by deputy president Helen Wong in mid-April.

Analysts expect Singapore banks to show a profit rebound this year led by sustained growth in their wealth-management business and as improved economic prospects cushion the impact of net interest margins hovering near record lows.

OCBC’s October-December net profit came in at $1.13 billion versus $1.24 billion a year earlier, and compared with the $955.9 million average estimate of four analysts, according to data from Refinitiv.

The bank’s net interest margin, a key gauge of profitability, dipped to 1.56 per cent from 1.77 per cent a year earlier. Full-year net profit at OCBC, which counts Singapore, Greater China and Malaysia, among its key markets, shrunk 26 per cent from a record…

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From The Straits Times - 24/02/2021